Office construction is a little thin.
Although vacancy is dropping, owners and developers are waiting for rents to increase before justifying the cost of constructing new buildings. Costs are high, largely due to the rising prices of materials such as steel and concrete.
Orange County completions in the fourth quarter included just one 13,261-square-foot building at Birch Bayview Plaza in Newport Beach. Breaking ground in the quarter was a five-story, 131,687-square-foot building at Olen Pointe Brea.
Construction expected to be completed in the first quarter include 4 and 5 First American Way in Santa Ana, adding 220,000 square feet; buildings B and C at Birch Bayview Plaza in Newport Beach for a total of 34,359 square feet; and building 9 in Foothill Business Park on Rancho Parkway in Lake Forest.
While the county generally lies dormant for industrial completions and activity, West County saw the most activity in the fourth quarter.
In Huntington Beach, 16350 Gothard completed construction, adding 110,000 square feet of warehouse space.
West County also saw construction begin on five new buildings. Two buildings at Astronautics Corporate Center are set to be completed in the second quarter for a total of 107,132 square feet of warehouse space. Three warehouse buildings on Rancho Road will add 111,035 square feet when completed as expected in the second quarter.
Outside of West County, building six of Talega Business Park on Calle Avanzado wrapped up construction in the fourth quarter, contributing 20,677 square feet of manufacturing space to San Clemente.
Overall retail construction activity in OC is up significantly from a year ago. New retail space under construction is expected to add more than 1 million square feet.
One major center was completed in the fourth quarter,a 74,000-square-foot strip center at Siboney Street and Katella Avenue in Cypress.
Two centers,each about 150,000 square feet,broke ground in the fourth quarter in Huntington Beach.
Central Coast currently has one 300,000-square-foot specialty center in Irvine Spectrum under construction, and the fairly active Central County has two centers in Anaheim set to add 325,000 square feet.
Nielson is a researcher in CB Richard Ellis Group Inc.’s Newport Beach office.
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